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Koch Invests in Biofuels Despite Opposition to Renewable Quota
Charles and David Koch at this point are likely more well known for
their political activities than for their namesake energy and
But while the billionaire brothers' political juggernaut explicitly
calls for "truly free markets," their company pounced on an opportunity
to capitalize on biofuels — an industry famously bolstered by government
Bloomberg recently chronicled the unlikely rise of Koch Industries from
a non-factor in renewable fuel to the nation's No. 5 producer of ethanol
over the past five years.
Koch Industries traces its roots to an oil refinery business founded by
the Charles and David's father Fred in 1940, which the brothers
transformed into what is now one of the nation's largest privately owned
Their largesse allows them to fund both libertarian think tank the Cato
Institute and conservative advocacy group Americans for Prosperity, and
the brothers are ardently opposed to mandates such as the renewable fuel
standard — which directs renewable fuels to be blended into gasoline and
powers the corn-based ethanol industry in the U.S.
In 2010, however, the head of Flint Hills Resources, the company's
refinery and chemicals subsidiary, persuaded his bosses to buy ethanol
plants after rising corn prices prompted bankruptcies by some of the
industry's top players.
“I think it did surprise people, initially, when we made the first
couple of acquisitions,” Jeremy Bezdek told Bloomberg.
Company officials maintained that Koch remains opposed to the renewable
fuel standard and is investing its resources to ensure that the biofuel
operations remain profitable should it be repealed.
One step in that process, Bloomberg noted, is a new $100 million
biodiesel plant in southeastern Nebraska that can convert multiple
feedstock materials into compounds for fuel, pharmaceuticals and even
“Flint Hills had become an important player in the biofuel world before
the opening of the Beatrice plant,” analyst Heather Zhang told the
publication. “The new plant will just make the firm have better
competitive advantages over other similar firms.”
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